Software Ate the World, Here's How It Eats Finance

Published on

Feb 26, 2020

by Coindesk | Published on

Coinage

Unlike the examples above, financial services can be a much more difficult beast.

Bankers today still struggle with questions about how Amazon and Apple will enter financial services, or whether digital currencies will be launched by central banks, or what shape regulation will take for tokenized assets.

Historically, financial sectors developed independent infrastructures under separate, local regulations.

Hedges, insurance, derivatives and other techniques create further certainty across one's financial journey.

Financial products are made in the factory, manufactured as deposit accounts, exchange-traded funds, underwritten debt or insurance policies.

Think of CRM, KYC/AML, trading software, collateral management, financial planning, and other feature sets as the intermediating set of steps to get a financial product into the hands of its final customer.

Financial products are sold, not bought, which means that distribution remains valuable, regardless of the form.

Over the last decade, venture capital has funded an incredible assault on financial incumbents.

A seismic rebalancing of financial services "Disruption" investment occurred - but it focused primarily on distribution.

Trillions in value-added economic activity can flow through modular, expandable rails that standardize and mutualize identity, accounting, financial instruments, and the workflows that today are captured across thousands of niche software platforms.